Directions: Ratio Calculation, use formulas to calculate the following financial

ID: 2812284 • Letter: D

Question

Directions: Ratio Calculation, use formulas to calculate the following financial indicators for each year of data:

o Current ratio

o Debt/equity ratio

o Free cash flow

o Earnings per share

o Price/earnings ratio

o Return on equity

o Net profit margin

o Describe how and why each of the ratios has changed over the three-year period. For example, did the current ratio increase or decrease? Why? Describe how three of the ratios you calculated for your company compare to the general industry. Find general industry data by entering your specific company’s ticker symbol here. Be sure to watch the Mergent Online video (written instructions can be found here), as it will help you find the industry data

Below is Amazons balance heet for 2017

Amazon.com Inc (NMS: AMZN)

Below is Amazons income statment for 2017

Below is Amazons Cash Flow for 2017

2017

Below is Amazons balance heet for 2017

Amazon.com Inc (NMS: AMZN)

Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 12/31/2017 Currency USD Audit Status Not Qualified Consolidated Yes Scale Thousands Cash & cash equivalents 20522000 Marketable securities 10464000 Inventories 16047000 Accounts receivable, net & other current assets, gross - Less: Allowance for doubtful accounts receivable - Accounts receivable, net & other current assets, net 13164000 Total current assets 60197000 Land & buildings 23718000 Equipment & internal-use software 38387000 Other corporate assets 2390000 Construction in progress 4078000 Gross property & equipment 68573000 Less accumulated depreciation 19707000 Property & equipment, net 48866000 Goodwill 13350000 Other assets 8897000 Total assets 131310000 Accounts payable 34616000 Accrued expenses & other current liabilities 18170000 Unearned revenue 5097000 Total current liabilities 57883000 Long-term debt 24743000 Long-term capital lease obligations 8438000 Long-term financing lease obligations 4745000 Construction liability 1350000 Tax contingencies 1004000 Long-term deferred tax liabilities 990000 Other long-term liabilities 4448000 Other long-term liabilities 20975000 Common stock 5000 Treasury stock, at cost 1837000 Additional paid-in capital 21389000 Foreign currency translation adjustments, net of tax -468000 Unrealized gains (loss) on available-for-sale securities, net of tax -16000 Accumulated other comprehensive income (loss) -484000 Retained earnings (accumulated deficit) 8636000 Total stockholders' equity (deficit) 27709000

Below is Amazons income statment for 2017

Amazon.com Inc (NMS: AMZN) Exchange rate used is that of the Year End reported date As Reported Annual Income Statement Report Date 12/31/2017 Currency USD Audit Status Not Qualified Consolidated Yes Scale Thousands Net product sales 118573000 Net services sales 59293000 Total net sales 177866000 Cost of sales 111934000 Fulfillment expenses 25249000 Marketing expenses 10069000 Technology & content expenses 22620000 General & administrative expenses 3674000 Other operating expense (income), net 214000 Total operating expenses & costs 173760000 Income from operations 4106000 Interest income 202000 Interest expense 848000 Other income (expense), net 346000 Total non-operating income (expenses) -300000 Income (loss) bef income taxes- United States 5630000 Income (loss) before income taxes - International -1824000 Income (loss) before income taxes 3806000 Current income taxes - U.S. federal -137000 Current income taxes - U.S. state 211000 Current income taxes - international 724000 Total current income taxes 798000 Deferred income taxes - U.S. federal -202000 Deferred income taxes - U.S. state -26000 Deferred income taxes - international 199000 Total deferred income taxes -29000 Provision (benefit) for income taxes 769000 Equity-method investment activity, net of tax -4000 Net income (loss) 3033000 Weighted average shares outstanding-basic 480000 Weighted average shares outstanding-diluted 493000 Year end shares outstanding 484000 Net income (loss) per share-basic 6.32 Net income (loss) per share-diluted 6.15 Total number of employees 566000 Number of common stockholders 2357 Foreign currency translation adjustments 533000

Below is Amazons Cash Flow for 2017

Amazon.com Inc (NMS: AMZN) Exchange rate used is that of the Year End reported date As Reported Annual Cash Flow Report Date 12/31/2017 Currency USD Audit Status Not Qualified Consolidated Yes Scale Thousands Cash & cash equivalents, beginning of period 19334000 Net income (loss) 3033000 Depreciation of property & equipment, including internal-use software & website development, & other amortization 11478000 Stock-based compensation 4215000 Other operating expense (income), net 202000 Losses (gains) on sales of marketable securities, net - Other expense (income), net -292000 Deferred income taxes -29000 Excess tax benefits from stock-based compensation - Inventories -3583000 Accounts receivable, net & other current assets -4786000 Accounts payable 7175000 Accrued expenses & other liabilities 283000 Additions to unearned revenue 738000 Amortization of previously unearned revenue - Net cash flows from operating activities 18434000 Purchases of property & equipment, including internal-use software & website development -11955000 Proceeds from property & equipment incentives 1897000 Acquisitions, net of cash acquired, & other investing activities -13972000 Sales & maturities of marketable securities 9988000 Sales & maturities of marketable securities & other investments - Purchases of marketable securities -13777000 Purchases of marketable securities & other investments - Net cash flows from investing activities -27819000 Excess tax benefits from stock-based compensation - Proceeds from long-term debt & other financing activities 16231000 Repayment of long-term debt - Repayments of long-term debt & other financing activities -1372000 Principal repayments of capital lease obligations -4799000 Principal repayments of finance lease obligations -200000 Net cash flows from financing activities 9860000 Foreign-currency effect on cash & cash equivs 713000 Net increase (decrease) in cash & cash equivalents 1188000 Cash & cash equivalents, end of year 20522000 Cash paid for interest - Cash paid for interest on long-term debt 328000 Cash paid for interest on capital & finance lease obligations 319000 Cash paid for income taxes 957000

2017

Ratio Calculations Equations Current ratio / = #DIV/0! current assets / current liabilities Debt/equity ratio / = #DIV/0! total liabilities / total equity Free cash flow - = $ - total operating cash flow - capital expenditures Earnings per share / = #DIV/0! net income / common shares outstanding Price/earnings ratio / = #DIV/0! stock price / earnings per share Return on equity / = #DIV/0! net income / total equity Net profit margin / = #DIV/0! net income / total revenue

Explanation / Answer

current ratio

current assets/current liabilities

60197000/57883000

1.039977195

debt equity ratio

total of liabilities/total shareholders equity

103601000/27709000

3.7388935

total of liabilities

57883000+24743000+8438000+4745000+1350000+1004000+990000+4448000

103601000

total of shareholders equity

27709000

free cash flow

cash flow from operating activities-cash flow from investing activities

18434000-27819000

-9385000

EPS

net income/no of shares

3033000/480000

6.31875

price earning ratio

market price/EPS

market price/6.318

market price is not given

return on equity

net income/total of equity

3033000/27709000

10.95%

net profit margin

net income/total net sales

3030000/177866000

1.70%